1st Quarter Results
General Electric Company
12 April 2001
GE Reports Record First-Quarter 2001 Results - Ongoing Earnings Up 16% to
$3.017 Billion
Industrial Revenues Up 11%
Fairfield, Conn. - April 12, 2001 - GE achieved record earnings for the first
quarter of 2001, posting a 16 percent increase in ongoing earnings, GE
Chairman and CEO John F. Welch reported today. Ongoing earnings exclude the
one-time, non-cash impact of adopting new accounting rules.
'GE's broad-based portfolio strength was again demonstrated in the first
quarter. Long-cycle businesses grew operating profit 36%. GE Capital
Services had a strong quarter with ongoing earnings growth up 16%. Our short-
cycle businesses, impacted by the US economic slowdown, reported operating
profit down 5%', Mr. Welch said.
Specific highlights include:
Revenues rose to a record $30.5 billion. Revenues for GE's industrial
businesses were up 11% over last year's first quarter, demonstrating the
strength of GE's broad portfolio throughout business cycles. Industrial
revenues in the quarter were driven by long-cycle product and services
strength in Power Systems, Medical Systems, and Aircraft Engines.
First-quarter ongoing earnings increased 16% to $3.017 billion, and ongoing
earnings per share met analysts' consensus estimates increasing 15% to $30, up
from last year's $26. Both were records for the quarter.
Cash generated from GE's operating activities were a record $3.1 billion in
the first quarter, up 18% from last year's $2.6 billion. As part of the $22
billion share repurchase program, GE purchased $852 million of its stock
during the first quarter to reach $18.4 billion, or 972 million shares,
purchased since December 1994.
GE's first-quarter operating margin was 17.7% of sales, up from last year's
17.3%, and was a record for the quarter. The first-quarter margin growth
reflects the increasing benefits from GE's focus on services, Six Sigma
quality and digitization initiatives.
GE Capital Services' first-quarter ongoing earnings rose to $1.401 billion,
16% over last year's $1.210 billion. These results reflect the globalization
and diversity of GE Capital's businesses, with strong double-digit increases
in its Consumer Services, Equipment Management and Speciality insurance
segments. Revenues for GE Capital Services declined 6% principally because of
strategic decisions to exit businesses included in last year's quarter,
primarily Montgomery Wards, Mortgage Services and Auto Financial Services.
Recent Financial Accounting Standards Board actions changed the accounting
rules for derivatives, warrants, options and other financial instruments
(SFAS 133 and EITF 99-20). The cumulative effect of these changes for
positions held as of December 31, 2000, was one-time, non-cash $444 million
($0.4 per share) charge. This charge was required to be recorded in the first
quarter 2001 and reduced earnings to $2.573 billion. The impact of applying
these new accounting rules in the first quarter increased earnings $12
million.
'In addition to delivering record first-quarter results, GE's businesses made
aggressive moves to position themselves for strong future growth,' Mr. Welch
said.
Highlights of recent activities include:
GE Power Systems (GEPS) continued to win orders for heavy-duty gas turbines in
the US and globally, where strong demand for new generation equipment drove
orders up 68% over the first quarter 2000 to $6.8 billion. Significant
activity in Italy and Spain, together with the announcement of $188 million in
contracts to supply equipment and long-term services for a 350 megawatt plant
in Malaysia, helped fuel this growth. Other major orders during the quarter
included nine 7FA gas steam turbines from Dominion Energy. Demand for fully
packaged 25 to 60 megawatt gas turbines at GEPS Aero Energy Products unit
continued to build on record levels with a total of 33 aeroderivative units
shipped during the quarter, a 200% increase over 2000. Power Systems added
$2.7 billion in new service agreements in the quarter bringing the total
commitments for these multi-year contracts to $17.7 billion, up $7.7 billion
from the first quarter of 2000.
GE Medical Systems (GEMS) products and services showed continued strong
momentum, with orders up 21% overall in the quarter. Orders for networking
and image archiving systems were up 93% as hospitals move to digitize workflow
within radiology departments. X-ray orders, driven by strong customer demand
for digital mammography and digital cardiac imaging systems, were up 35%. The
continued growth of positron emission tomography (PET) imaging, coupled with
the completion of GEMS acquisition of Sopha Medical Vision, resulted in an
orders increase for this technology of 166%. GEMS achieved nearly $200
million in online purchases of goods and services through e-Auctions in the
first quarter.
GE Aircraft Engines announced orders totalling $1.5 billion with significant
wins including Japan Airlines, EVA Air, Qatar Airways, and Qantas. In
addition, CFMI International, a 50/50 joint venture with Snecma reported
orders of $800 million. The development programs to support the growth in
regional jets achieved a significant milestone with the first successful
flight test of the CF34-powered, 90-passenger, Bombardier regional jet.
Orders to date for CF34 engines, which also power Fairchild Dornler and
Embraer regional jets, now exceed $6 billion.
GE Capital Services positioned its businesses for future growth through
acquisitions and core growth. Commercial Equipment Finance reached an
agreement valued at $2.1 billion to acquire Franchise Finance Corporation of
America, with assets of more than $3 billion - a premier chain restaurant
financier in the US. Penske Truck Leasing added 270 locations in the US and
Canada through its purchase of Rollins Truck Leasing Corporation. Global
Consumer Finance moved to expand its ownership stake in Hungarian retail bank
Budapest Bank through a public offer for all remaining outstanding shares.
NBC posted its fourth straight sweeps win in the key adults 18-49 demographic,
airing six of the top ten performing shows. In primetime, NBC maintained
broad programming strength with the top drama (ER), the top 5 comedies
(Friends, Will & Grace, Just Shoot Me, Frasier and Weber), and the top-rated
newsmagazine (Dateline). NBC enjoyed record daytime performance and was the
only network with ratings growth over 2000. Jay Leno, Late Night, and SNL
continued to win their time slots. News held its number one position across
Nightly News, Meet the Press, and Today Show. NBC cable continued to grow
share and CNBC continued to record double-digit earnings growth. NBC
announced an agreement to acquire all the remaining outstanding shares of
NBCi.
GE Plastics through its GE Silicones operating unit, announced an agreement
with Toshiba and Shin-Etsu Chemical of Japan to build a jointly owned facility
in Thailand. The plant, with a planned investment of approximately $250
million, will be the largest silicones manufacturing facility in Asia.
Mr. Welch concluded: 'The record results for the first quarter once again
demonstrate the ability of GE's diverse mix of leading global businesses to
deliver earnings growth, increased margins and strong cash generation despite
a challenging economic climate. The strength of our long-cycle businesses
combined with our ongoing initiatives - globalization, Six Sigma, services and
digitization - position GE to deliver another year of record performance in
2001.
Media contact: Gary Sheffer (203) 373-3476
Caution concerning forward-looking statements
This document includes certain 'forward-looking statements' within the meaning
of the Private Securities Litigation Reform Act of 1995. These statements are
based on management's current expectations and are subject to uncertainty and
changes in circumstances. Actual results may differ materially from these
expectations due to changes in global economic, business, competitive market
and regulatory factors. More detailed information about those factors is
contained in GE's filings with the Securities and Exchange Commission.
GENERAL ELECTRIC COMPANY
All amounts except per-share earnings are in millions of US dollars
THREE MONTHS ENDED MARCH 31,2001
2001 ($) 2000 ($) V%
Revenues 30,493 29,996 2
Earnings before 2001 accounting changes 3,017 2,592 16
Effects of 2001 accounting changes (444)
Earnings after 2001 accounting changes 2,573
Per-Share Earnings
Diluted:
Before 2001 accounting changes 0.30 0.26 15
Effect of 2001 accounting changes (0.04)
After 2001 accounting changes 0.26
Basic:
Before 2001 accounting changes 0.30 0.26 15
Effect of 2001 accounting changes (0.04)
After 2001 accounting changes 0.26
Segment Information
Revenues 2001 ($) 2000 ($) V%
Aircraft Engines 2,738 2,441 12
Appliances 1,315 1,381 (5)
NBC 1,351 1,393 (3)
Industrial Products and Systems 2,904 2,785 4
Plastics 1,870 1,861 -
Power Systems 4,260 3,210 33
Technical Products and Services 1,998 1,753 14
GE Capital Services 14,723 15,681 (6)
Segment Profit
Aircraft Engines 598 558 7
Appliances 146 150 (3)
NBC 346 394 (12)
Industrial Products and Systems 423 514 (18)
Plastics 439 437 -
Power Systems 951 453 F
Technical Products and Services 411 340 21
GE Capital Services net earnings before 1,401 1,210 16
accounting changes
CONDENSED STATEMENT OF EARNINGS
Three months ended March 31 Consolidated GE GECS
2001 ($) 2001 ($) 2001 ($)
Revenues
Sales of goods and services 16,860 15,850 1,068
Earnings of GECS - 1,401 -
GECS revenues from services 13,574 - 13,655
Other income 59 109 -
Total revenues 30,493 17,360 14,723
Costs and expenses
Cost of sales, operating and 18,855 13,044 5,923
administrative expenses
Interest and other financial 3,076 255 2,898
charges
Insurance losses and policyholder 3,523 - 3,523
and annuity benefits
Provision for losses on financing 483 - 483
receivables
Minority interest in net earnings 102 45 57
of consolidated affiliates
Total costs and expenses 26,039 13,344 12,884
Earnings before income taxes and 4,454 4,016 1,839
cumulative effect of changes in
accounting principle
Provision for income taxes (1,437) (999) (438)
Earnings before cumulative effect 3,017 3,017 1,401
of changes in accounting
principle
Cumulative effect of accounting (444)
changes
Net earnings 2,573
Per-share amounts before
accounting changes (in dollars)
Diluted earnings per share 0.30
Basic earnings per share 0.30
Per-share amounts after
accounting changes (in dollars)
Diluted earnings per share 0.26
Basic earnings per share 0.26
Dividends declared per share (in 0.16
dollars)
Three months ended March 31 Consolidated GE GECS
2000 ($) 2000 ($) 2000 ($)
Revenues
Sales of goods and services 16,542 14,370 2,233
Earnings of GECS - 1,210 -
GECS revenues from services 13,383 - 13,448
Other income 71 83 -
Total revenues 29,996 15,663 15,681
Costs and expenses
Cost of sales, operating and 19,656 11,889 7,864
administrative expenses
Interest and other financial 2,782 253 2,570
charges
Insurance losses and policyholder 2,930 - 2,930
and annuity benefits
Provision for losses on financing 521 - 521
receivables
Minority interest in net earnings 98 48 50
of consolidated affiliates
Total costs and expenses 25,987 12,190 13,935
Earnings before income taxes and 4,009 3,473 1,746
cumulative effect of changes in
accounting principle
Provision for income taxes (1,417) (881) (536)
Earnings before cumulative effect 2,592 2,592 1,210
of changes in accounting
principle
Cumulative effect of accounting -
changes
Net earnings 2,592
Per-share amounts before
accounting changes (in dollars)
Diluted earnings per share 0.26
Basic earnings per share 0.26
Per-share amounts after
accounting changes (in dollars)
Diluted earnings per share 0.26
Basic earnings per share 0.26
Dividends declared per share (in 0.13 2/3
dollars)
Dollar amounts in millions; per-share amounts in dollars; unaudited.
Supplemental consolidating data are shown for 'GE' and 'GECS'. Transactions
between GE and GECS have been eliminated from the 'consolidated' columns. See
note 1 to the consolidated financial statements in the 2000 Annual Report to
Share Owners for further information about consolidation matters.